Cancer is now the top driver of large company health care costs

Cancer took over the top spot from musculoskeletal conditions

Cancer is now the top driver of large company health care costs according to Business Group on Health’s 2023 Large Employers’ Health Care Strategy and Plan Design Survey.Previously, musculoskeletal conditions were the biggest cost.

The top three conditions fueling health care costs were the same as last year, with cardiovascular disease rounding out the top three, 13% of employers say they have seen more late-stage cancers and another 44% anticipate seeing such an increase in the future, possibly due to pandemic-related delays in care.

“Employers shared that they are deeply concerned about unsustainable health care costs, the devastating effects of the pandemic on employee health, and the need to work creatively with their partners toward a more positive and sustainable health care experience, among other issues,” said Ellen Kelsay, president and CEO of Business Group on Health, in a statement.

Key findings in the report include:

  • After experiencing no increase in actual health care cost from 2019 to 2020, employers experienced a significant return to rising costs, with a median 2021 cost increase of 8.2%.
  • Despite rising costs, employers expect to cover 82% of the cost of employee coverage in 2022, up from 80% the year before (employer support for family coverage remains at 80% of premium). As costs increase, employers have been reluctant to shift costs to employees in the short-term and are looking at fundamental delivery system reforms, such as advanced primary care and centers of excellence for specific health conditions, to address unsustainable health care expenses and prescription drug costs.
  • Large employers overwhelmingly (99%) said they were concerned about prescription drug trend. In 2021, prescription drugs accounted for a median of 21% of employers’ health care costs, with more than half of pharmacy spend going to specialty medications.
  • Long-term mental health issues, both observed and anticipated, are the leading health-related impact of the pandemic, employers said, with increases in medical services due to delayed care a close second. Some 43% have already seen this trend and another 39% anticipate such increases.
  • Three-quarters of employers (74%) believe that virtual health will significantly impact future health care delivery, but 84% said integrating virtual health and in-person care delivery is critical for success. Employers showed interest in virtual primary care -- 32% will offer these services in 2022, while a total of 69% may do so in 2025.
  • Health equity continues to be top of mind for employers, with three in four sharing concern about inequities in their company’s health and well-being initiatives. Most employers plan to address such issues in 2023, and plan to tackle additional social determinants of health, including racism, and across such areas as childcare, transportation, and food access/insecurity, in the years 2024 and 2025.